Parsvnanth Developers
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Showing posts with label Parsvnath. Show all posts
Showing posts with label Parsvnath. Show all posts
Monday, July 05, 2010
Saturday, May 01, 2010
Saturday, January 02, 2010
Thursday, September 03, 2009
Parsvnath Developers gains on plan to trim debt
Parsvnath Developers rose 2.48% to Rs 120 at 15:20 IST on reports the company plans to sell as much as $100 million of shares and a stake in a real estate project.
Meanwhile, the BSE Sensex was down 104 points, or 0.67%, to 15385.29.
On BSE, 2.61 lakh shares were traded in the counter as against an average daily volume of 7.58 lakh shares in the past one quarter.
The stock hit a high of Rs 121.60 and a low of Rs 118.20 so far during the day. The stock had hit a 52-week high of Rs 130.30 on 31August 2009 and a 52-week low of Rs 30.55 on 23 March 2009.
The stock had underperformed the market over the past one month till 2 September 2009, falling 3.14% as compared to the Sensex 1.29% decline. It outperformed the market in past one quarter, gaining 16.63% as against 3.98% rise in the Sensex.
The mid-cap real estate developer has an equity capital of Rs 184.70 crore. Face value per share is Rs 10.
The current price of Rs 120 discounts the company's Q1 June 2009 annualised EPS of Rs 3.02, by a PE multiple of 39.73.
Parsvnath Developers's chairman Pradeep Jain was quoted by media as saying that the company aims to sell shares to institutional investors by the end of October 2009, and a stake in a housing project this month to a private equity fund. Mr Jain, however, did not provide additional details on the project stake, or the amount to be raised.
In June this year, the company is reported to have got Rs 90 crore from private equity firm Red Fort Capital for a stake in a New Delhi housing project.
According to reports, Parsvnath, which expects to get about Rs 5000 crore from sale of homes over 24 to 30 months, aims to trim its debt to Rs 500 crore by March 2009. As of 30 June 2009, the company's debt stood at Rs 1700 crore, due for repayment by March 2011.
Parsvnath Developers' net profit fell 80.5% to Rs 13.93 crore on a 70.6% decline in sales to Rs 107.26 crore in Q1 June 2009 over Q1 June 2008.
Parsvnath Developers is engaged in developing real estate. It includes township development, construction of retail shopping malls, hospitals, hotels and clubs.
Promoters have pledged 10.36 crore shares or 56.12% stake of the company. Total promoter shareholding in the company is 80.33% (as on 30 June 2009).
Friday, August 22, 2008
Sunday, August 10, 2008
Parsvnath Developers
The recent hikes in interest rates and the continuing scenario of unaffordable housing may prove to be an intimidating combination for the real-estate sector and realty developers. While rising cost of home loans can affect demand, higher funding requirements and steadily rising borrowing costs present risks for developers.
While the prospects for the sector over the long-term remain bright, the current macro environment for realty stocks is definitely less favourable than seen at the time of many of the IPOs in the sector.
Tackling real issues
Given the above, companies with a comfortable funding position, ability to generate quick cash flows and a reasonably assured near-term revenue stream, may make for better investment options within the sector. In this context, we recommend that investors in Parsvnath Developers exit the stock. The company’s aggressive portfolio of long-term revenue yielding assets, significant funding requirements for the above projects combined with high exposure to the National Capital Region (NCR), which is now showing signs of slowdown, add to the risks in the investment.
Investors can instead take exposure to Housing Development and Infrastructure (HDIL). The company, focussed on the Mumbai region, has experience in high-potential slum rehabilitation schemes and relatively easy access to funds through sale of Transferable Development Rights (TDRs), with several projects due for completion in the near future. (See our IPO analysis in Business Line edition dated June 24, 2007 ). At a P-E multiple of about 6 times its trailing 12 month earnings, the HDIL stock is at a slim premium to Parsvnath.
Regional risks
From being an NCR-focussed player, Parsvnath has made an attempt to diversify into other regions in the South and West. However, the Delhi NCR and northern regions together still account for 69 per cent of the saleable area. Its exposure to Tier-II and Tier-III cities also remains high.
While in a different kind of market, this combination would have fetched the company premium pricing and faster growth, the current scenario has made the task more difficult for Parsvnath. Over 50 per cent of Parsvnath’s saleable area arises from the residential space.
With higher home loan rates, developers may have to resort to lower pricing and other offers to woo customers. Such a move could well result in lower profitability for players in the medium term.
For instance, the company, in early 2008 announced an ‘EMI reimbursement’ scheme (for a 2.2 million sq ft project ) for customers to provide flexibility in payment plans. Similar instances of discounts or EMI holidays by developers especially in NCR appears to suggest that demand could be waning. Further, Parsvnath’s presence in Tier-III cities is also a risk, as the demand-supply disequilibrium is greater in these cities compared to a prime market such as Mumbai.
While the commercial scene had remained strong until 2007, a Cushman & Wakefield report is suggestive of increasing supply in Delhi and NCR . Vacancy rates in Noida, for instance, have increased from less than 4 per cent in the fourth quarter of 2007 to 15 per cent in the second quarter of 2008. The lease as well as capital values may, therefore, face the risk of a decline. The risk of Parsvnath’s inventory entering the market during a high supply phase appears high.
Few near-term drivers
Parsvnath’s high exposure (36 per cent) to Special Economic Zones (SEZs) also does not also provide comfort, given the long-term nature of revenue flows from such projects. The only steady contribution to revenues could come from BOT projects bagged from the Delhi Metro Rail Corporation. The proportion of saleable area from this project, however, remains insignificant.
Increasing funding needs
Parsvnath has about 211 million sq. ft of developable area with 79 million sq ft under construction. The funding requirement will, therefore, continue to be high. Cash flows, especially from residential projects, could be slower if liberal payment schemes are continued.
With a high gearing ratio of close to two, Parsvnath may find it tough to borrow at reasonable interest rates. Its average borrowing costs over the last two quarters have remained at 13 per cent; this could, however, increase with the recent spate of rate hikes. While there have been inflows from private funding channels, investors have been selective in their projects. Parsvnath’s Mumbai ‘BEST’ depot project has received investments from the Saffron group funds.
Investments in riskier core realty projects have been less forthcoming in recent months except for large players such as Unitech or DLF.
Financials
Parsvnath’s consolidated sales and profits for the quarter ended June 2008 have witnessed a decline. While cost of development has seen a marginal increase, steep increase in staff costs have pulled down operating profit margins by 300 basis points. Interest costs have increased five-fold on a Y-o-Y basis. The quantum of debtors has more than doubled even as sales slowed. This again, poses a risk to the much-needed cash flow required to ease working-capital requirements.
Wednesday, July 16, 2008
Friday, February 15, 2008
Thursday, February 07, 2008
Sunday, November 04, 2007
Parsvnath Developers: Buy
nvestors with a 2-3 year perspective can consider an exposure in the stock of Parsvnath Developers. At the current market price, the stock is attractively valued at 16 times its trailing 12-month earnings. Strong execution skills, geographical and business diversification, and high earnings visibility from projects under construction are supporting factors to our recommendation.
Parsvnath’s land bank consists of registered land from private parties or land from the Government for which allotment letters have been received. The land portfolio’s clear titles and approved use mitigate execution risks. Of the total land bank, 76 million sq ft or 40 per cent of land held is already under development. A good portion of this has already been sold, essentially securing earnings, which would be booked over the next couple of years. Any slowdown in property demand at a later date is therefore unlikely to dent medium-term earnings.
The company’s current projects have a well-diversified mix of residential, commercial, township, hotels and build operate transfer (BOT) projects for Delhi Metro Rail Corporation. The geographical mix of land is also diversified across 48 cities with no location accounting for more than 10 per cent of the total land bank.
Two-thirds of the company’s land bank is, however, located in tier-III cities, generally considered risky. However, residential and integrated township projects form a chunk of the company’s projects. Of these, as mentioned earlier, a good proportion of residential projects have been sold.
Further, integrated townships provide flexibility to change plans to suit market requirements as they are only built in phases. We believe these features may provide some cushion against risk of high exposure in tier-III cities.
Another noticeable feature of Parsvnath’s project basket is the BOT project from Delhi Metro Rail Corporation wherein the company can develop and earn revenue from the land leased by Metro Rail. Although relatively less significant in terms of developable area, we believe that the company could leverage this experience to bid for similar projects in other cities. Given the huge land holding held by the Railways, there exists high business potential for developers if such land is unlocked by way of long-term lease.
We view the company’s move to apply for telecom licence with caution as the current business of real estate alone demands significant resource and skills. However, that the company plans to foray into this business (if approved) through a separate entity provides some comfort.
Friday, November 02, 2007
Thursday, November 01, 2007
Wednesday, August 29, 2007
Thursday, August 09, 2007
Wednesday, June 20, 2007
IPO makes DLF's KP Singh richest realtor
DLF promoter K P Singh has emerged as the richest real estate baron after his company’s initial public offering closed on June 14.
Promoters of the dozen top listed real estate developers in the country, including DLF Ltd, which will be listed next month, are worth a massive Rs 125,845 crore (or over $30 billion).
However, the lion’s share of this net worth (derived on the basis of the latest m-cap) lies with DLF’s K P Singh and his family — Rs 77,915 crore (around $19 billion) based on the allotment price of Rs 525 per share and their shareholding of around 87.3 per cent in the company.
According to BS research, this makes K P Singh the fourth richest Indian by today’s market capitalisation, after Mukesh Ambani, Anil Ambani and Sunil Mittal. He overtakes Wipro’s Azim Premji, who ranks immediately after him. In effect, the DLF promoter family accounts for around 60 per cent of the realty wealth as denoted by market cap.
Promoter | Net worth |
| KP Singh & Associates (DLF Ltd) | 77,915 |
| Ramesh Chandra & Associates (Unitech) | 30,544 |
| Sobha Menon & Associates (Sobha Developers) | 5,277 |
| Pradeep Jain & Associates (Parsvnath Developers) | 4,768 |
| Shah family & Associates (Akruti Nirman) | 2,075 |
| Pranav, Sushil Ansal & Associates (Ansal Properties & Infrastructure) | 1,965 |
| Piramal Family & Associates (Peninsula Land) | 1,291 |
| Mahindra Gesco Developers | 1,076 |
Second, and by a distant margin, is the Unitech Ltd promoter family —which includes Ramesh Chandra and his sons Sanjay and Ajay. Their net worth is about half of DLF’s — at Rs 30,544 crore (around $7.4 billion).
The Unitech promoters hold a 74.33 per cent stake in the listed entity. Last August, Business Standard had valued Ramesh Chandra’s net worth at Rs 12,670 crore.
In March, Forbes ranked Chandra as the world’s 114th richest billionaire.
The substantial difference between the net worth of DLF and Unitech promoters is significant because the two companies are considered comparable in terms of their land assets, among other things.
The Bangalore-based Menon family and associates own just under 87 per cent of Sobha Developers. At Rs 5,277 crore ($1.28 billion), the Menons’ net worth is nearly a fifth of the Unitech family’s.
Parsvnath Developers’ Pradeep Jain and family are ranked fourth — with Rs 4,768 crore ($1.16 billion) of net worth on the basis of their 80.33 per cent stake in the company.
The list also includes Mumbai-based Akruti Nirman, promoted by the Shah family, whose net worth stands at Rs 2,075 crore.
Labels:
Akruti Nirman,
Ansal Housing,
DLF,
Mahindra Gesco,
Parsvnath,
Peninsula Land,
Sobha Developers
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Monday, June 11, 2007
Cheapest real estate stock?
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Labels:
Cheapest Real Estate Stock,
DLF,
Parsvnath,
Polls,
Sobha Developers,
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Friday, May 04, 2007
Friday, March 16, 2007
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